Saturday, February 4, 2012

Farming in Australia: an uncomfortable truth

So what's happening in the state of agriculture in Australia?  It's always interesting to have a look at the stats which give a snapshot of what is happening in the industry. Rather than the rhetoric.

Basically what is happening is that farms and getting fewer and bigger. Supermarkets such as Coles and Woolworths control around 80% of the market for fresh food and this in turn is having an effect on the size of the operations who can supply them with the volume and prices they demand.

In her  2009 Sydney Morning Herald article, "Suburbs will swallow Sydney's market gardens", Debra Jopson asserted that in 2004 there were more than 4,000 vegetable producers in Australia and predicted that the number would soon drop to less than a thousand.  This article was written in 2009 so it would be interesting to know just how many are left in 2012.

The following stats from the Productivity Commission Research Paper, "Trends in Australian Agriculture" 5 July 2005, are worrying, to say the least:
  • over the 20 year period to 2002-3, the number of farms declined from around 178,000 to 132,000;
  • the average size of Australian farms increased from 2720 hectares to 3340 hectares (or by around 23%);
  • the proportion of farms with a value of operations less than $100,000 declined by 13% while the proportion of farms with a value of operations over $500,000 increased by 8%;
  • farm production has become more concentrated on large farms - the top 20% of broadacre farms account for 64% of output. 

Across many industries, the volume of food being produced is increasing and the number of producers is decreasing. Production of grain fed beef has more than trebled in the period since 1991-2, with grain fed beef comprising over 30% of total beef production in 2003-4. The number of cattle being 'finished' in feed lots has been consistently increasing from around 200,000 in 1991 to 700,000 in 2003-4, an annual average increase of around 11%. The Meat and Livestock Association website states that "600 accredited feedlots in Australia representing a total capacity of almost 860,000 cattle".  [] 

But wait.  There's (unfortunately) more. In her article about intensive and free range pig farming, Amanda Woods cites figures from Australian Pork Limited which show that in relation to the Australian Pork Industry, from 1980-2007 the number of Australian pig farmers fell by more than 90 per cent. At the same time, pig meat production almost doubled as pigs were taken out of fields and raised intensively, leading to an increase in the average herd size of nearly 900 per cent. ["Happy as a pig in Mudgee" Amanda Woods, The Australian, 20 February 2010]

This is the same industry which has came under public scrutiny for its intensive operations and appalling treatment of animals.

Surely the farmers must be winning though?

In 2008 the National Farmers' Federation stated that the amount paid to farmers ranged between 5-40% of the retail price of the product and that there is an increasing gap between the amount paid to farmers and retail prices.   ["National Farmers Federation Submission on the ACCC Inquiry into the Competitiveness of Retail Prices for Standard Groceries" March 2008; p. 7]

There is a notion pushed by the large supermarket chains and politicians that our food is too expensive and the increase in volumes and corresponding drop in prices is a good thing.  OECD comparisons are often cited as a reason why we are paying too much for our food in Australia.

However what is not taken into account is that Europe has a much higher concentration of people and a much smaller geographic footprint, so we should expect their fresh food prices to be cheaper than ours in Australia, where food often has to be transported long distances, our weather is extreme and our population much smaller. We really should pay more for food.

However, we've been brainwashed into thinking that we're paying too much for food and that prices should come down. In her article "Australian farmers sold short by cheap food", Sarah Kanowski notes that Australian's spent 22% of their household income on food in the 1960's; whereas now we spend only 14% of our household income on fresh food.  [Sarah Kanowski, "Australian farmers sold short by cheap food"; 9 March 2010]

Whether these figures take into account working women and an increase in household incomes is unknown, however she also cites in her paper, "The Farm", that agricultural products represent only 4% of the economy, whereas in the 1960's they were 14%. [Sarah Kanowski, "The Farm" Griffith Review, edition 27]

Michael Pollan, author of The Omnivore's Dilemma in an interview with Elizabeth Meryment says that the unflinching push for cheaper, artificially tastier food has resulted in supermarkets filled with highly processed "edible food like substances" that don't resemble real food.  He goes on to say that "conventional food is unnaturally cheap and I know people like cheap food but the reason it is cheap is because there are all sorts of hidden subsidies." ["Michael's beef with modern day food", Elizabeth Meryment, Taste, Daily Telegraph, 16 March 2010.]

Subsidies are only part of the issue.  Large scale farming operations with enormous volumes and cheaper prices are another part.

Farming operations which are able to supply the demand of the supermarkets are gerenally big-businesses.  With the dominance of such large companies controlling agriculture, smaller farmers are gradually disappearing, which will mean less competition, less choice and a lack of diversity.

Not only that, but our environment suffers. Large scale farming (also known as monoculture) is more susceptible to devastation by pests and therefore uses chemicals to prevent this. The soil becomes less nutrient and in an effort to continue production, chemical fertilisers are pumped into the earth, degrading it further.  Intensive animal farms wreak havoc on the environment and often keep the animals in sub-optimal conditions.

Is this the world we want to live in?

If not, how do we take control of the situation and reverse some of these trends?  We, the Australian consumer, are the ones in the driving seat when it comes to what's in our wallets.  We can choose to buy all our produce from a supermarket. Or we can grow some or all of our own food (an option for those who have the land to do it).  We can spend our money at smaller shops, like greengrocers, bakeries and local butcher shops. Like we used to.

Or we can shop at farmers' markets, where the money we spend goes directly to the person who sells us the food and keeps that small farming operation afloat.  Yes, it might be more expensive than what you buy in the supermarket, but your money is buying fresh, nutritious food and it is going directly to someone who grew the food, not a multi-national corporation.

I know that I want choice.  I want to know that I can buy organic or free-range, or even just conventionally-grown produce from a large farming company or a small boutique operation. I want my buying dollar to matter and I want to direct it where I think it should go.  I want small family farms to stay in business and I want them to keep the big guys honest.  Is this too much to ask?  

What do you want?

Recipe: Meatless Monday - Thai veggie curry

This recipe was one of those things I just threw together using the best of available seasonal produce from the markets.  I was inspired by the 10 Thai eggplants that I bought from Rita's stall that day and knew if I didn't do something with them immediately, sure as night follows day, they'd turn into compost by week's end.  Aren't they gorgeous??

Luckily I had all the ingredients to make a red Thai curry, but I honestly hadn't made one in, like, forever. And what a difference a year or two made (and using fresh produce from the markets). Oh me. Oh my. I know I rave about these Meatless Monday recipes, but the combinations of flavours and textures, the sweet squirtiness of the cherry tomatoes, the seedy crunch of the Thai eggplant and green beans and the reliable squishiness of the kumera made this "the best curry ever made in our house" according to Mr YourLocalMarkets. Big call.

Try it, I assure you, you won't be after me for a money back guarantee ;-)

1 tablespoon oil
10 Thai eggplant, halved. You can substitute other types of eggplant but it just won't be the same
400g chopped kumera
400g of chopped green beans (yes that's a lot, but you need your greens)
1 punnet cherry tomatoes or several generous handfuls
1 can baby corn
About 10 small mushrooms, cut in half (shitake is best but I used Swiss Brown, in season)
2 cans coconut cream
4 tablespoons good quality red curry paste (many in the jar are free of additives and preservatives)
5 kaffir lime leaves, sliced finely
Handful fresh basil and coriander leaves, chopped

Heat oil in large pot and cook curry paste and kaffir lime leaves.  Add 1/2 cup coconut cream to mix paste & cream together, then add rest of coconut cream.

Add kumera and eggplant and cook until soft (about 15 minutes). Then add all other vegetables and cook for around 5-10 minutes, ensuring that the beans are still bright green with a slight crunch.

Serve with rice and garnish with fresh herbs.

War: What is it good for? Milk & produce wars in Australia

Coles announced on Monday 30 January 2012 that it would cut certain fresh produce prices by 50% on a rotational basis, each week.  On Australia Day in 2011 Coles announced that it would sell its home brand milk for $1 a litre.

At first glance this may seem like a win for Australian consumers.  Who wouldn't want their fresh produce half price?  Milk at $1 a litre? But like most issues, especially economic ones, it's just not that simple.

Coles argues that it will simply be cutting the price of fruit & vegetables that are in surplus (the “bumper crop due to ideal growing conditions around the country”), so that farmers can sell it, rather than ploughing it back into the ground. However Coles has also admitted that it will be slashing prices of a range of vegetables, not just those that are abundant.

Many farmers are saying that these lower prices may force them out of business.  The rationale is that for farmers who don't supply Coles (many small farmers) they will be forced to offer the same or similarly low prices without the benefit of a supply contract with Coles.  And if they don't cut their prices consumers will shop at Coles and they will lose their customers. Lose-lose for growers.

Part of the problem with Coles' cutting prices, is that Coles and Woollies between them hold massive market share: more than 80% of the grocery market between them.  That's a huge market share which means that they control a lot of what is sold and produced in Australia.  

For years farmers, other industry participants and commentators have complained that the large supermarkets are putting pressure on growers to supply larger and larger volumes whilst pushing down prices for food.

The Supermarkets dominate many areas of retail: food, liquor, fuel & they're moving into hardware and want to get into pharmacies (don't get us started on them selling health when they're the largest sellers of tobacco products). Their dominance is such that they are now looking at other areas of the food industry to dominate, such as the supply and processing chain, and home branded products.

One way they can increase their home brand market share is to allocate valuable shelf space to their own products and price them lower, thus taking market share away from the branded products. In the most extreme scenario, the home branded product gains more market share than its branded cousins and the manufacturer of the branded products goes out of business, leaving the consumer with less choice.  And the supermarket with more power over pricing.  The supermarkets get bigger and its competitors gradually disappear.

This all sounds like pie in the sky stuff, but it is exactly what happened in the UK dairy industry.

In relation to milk however, it's part of the story.  The processors also play a part in the merry dance.  Processors are paid less money for processing home branded milk.  So as the home brand market share increases, the processors get less for the milk.  They in turn must recoup the losses somehow so naturally would turn to farmers and pay them less for their milk.  Margins are slashed for a grocery item that is already priced lower than water or soft drink.

When Coles and Woolworths started the "milk wars" on Australia Day in 2011, home brand milk was dropped to $1 a litre.  Farmers need to raise, feed and milk cows.  And make a profit. And keep up with inflation.  $1 a litre is currently less than a bottle of water.  Water. Which doesn't come from an animal and you would think, costs a lot less to put into a bottle and sell than milk.

The supermarkets say that they are working with industries to help them become more efficient.  However this doesn't seem to apply to many other industries.  Prices for everything are rising, but farmers are expected to take price cuts for milk because they're not efficient.

It's just not fair. 

This kind of price cutting also encourages farmers to pump their cows full of hormones to keep them milking all year round in conditions that are less than favourable to the animals.  An industry that actively encourages intensive farming seems to be an anomaly when consumers are becoming more concerned about the environment and animal welfare.  Conversely, it also discourages smaller enterprises (organics or those that are kinder to animals and the environment) that charge more for milk & dairy products.  

The milk wars may have claimed their first well-known casualty: Lion processing (who own Pura and Dairy Farmers milk) announced in November 2011 that it made a loss on its plain milk processing. You've got to wonder what it will do to the farmers further down the line over time.

Back to fruit & veggies.

So what happens to the money that is paid to farmers when the price drops 50%? Presumably most supply contracts to the supermarkets have prices for farmers locked in, but what happens when those contracts are up for renewal and the supermarkets start insisting that their revenue/profit from produce has dropped? 

The other concern is that with many other retail businesses, the supermarkets can raise the price of one (say, fuel) to ensure they don't suffer losses.  The result being we pay more for fuel and destroy agriculture in Australia.

Cutting prices of vegetables by 50% is very unlikely to benefit the dwindling number of small growers who do not supply Coles.  They are already having a difficult time surviving and each year, more and more disappear.  We need to do something about it before the 2 supermarkets control 100% of all vegetables bought in Australia. Before it's too late.